MARKET SNAPSHOT
U.S. stocks rallied and oil prices sank on the Middle East cease-fire agreement despite uncertainties about whether it will hold up and crude will flow normally through the Strait of Hormuz. Treasury yields pared down early declines but settled below Tuesday's levels on the first day of the U.S.-Iran cease-fire. Precious metals advanced as the dollar weakened.
MARKET WRAPS
EQUITIES
U.S. stocks rallied and government bond yields sank after President Trump said he had agreed to a cease-fire with Iran if the Strait of Hormuz reopened.
The immediate question for the financial world is whether tankers can start moving through the Persian Gulf and delivering supplies to increasingly strained global energy markets. Few ships have attempted the crossing so far, as the terms of safe passage remain unclear.
The Dow Jones Industrial Average added 2.9%. The Nasdaq composite gained 2.8% and the S&P 500 rose 2.5%.
The financial fireworks are among the most extreme since the U.S. and Israel first attacked Iran nearly six weeks ago. There's no guarantee that oil from the Middle East will start flowing in large volumes again, or that negotiations, set to begin Friday, will lead to a lasting peace. Even if they do, kickstarting the region's energy industry will take time.
For now, though, investors seem to be betting that Trump really wants to end a war that has led to the biggest oil-supply shock since the 1970s.
Earlier Wednesday, Asian markets staged a full-throated relief rally after the U.S. and Iran announced a ceasefire, putting risk-on back in the drivers' seat. Chip stocks across the continent rose sharply as the conditional cease-fire buoyed investor sentiment about lower chip-making costs and a continued AI investment boom.
Investors were unwinding some of their disaster hedges following the conditional two-week cease-fire agreement, said Saxo Markets chief investment strategist Charu Chanana.
China's Shanghai Composite Index gained 2.7% and the Shenzhen Composite Index climbed 4.4%. The tech-heavy ChiNext Index added 5.9%. Hong Kong's Hang Seng Index ended 3.1% higher after returning from a three-day break, with its tech gauge surging 5.2%, boosted by chip counters.
Japan's Nikkei Stock Average leapt 5.4%, marking its biggest daily percentage gain since April 2025.
South Korea's Kospi jumped 6.9%, supported by chip stocks.
Australia's S&P/ASX 200 Benchmark Index added 2.6%.
New Zealand's S&P/NZX 50 Index gained 1.4%. The RBNZ stood pat, continuing the wait-and-see approach adopted by most of its APAC peers as policymakers watch to see how deep the impact of the war will be, ceasefire or not.
COMMODITIES
Oil futures posted their sharpest single-day losses in six years as the U.S. and Iran reached a two-week cease-fire agreement that includes the reopening of the Strait of Hormuz.
The price retreat is contained somewhat by concerns about the truce holding, the outcome of negotiations, and the logistical complications and time involved in restoring the passage of oil through the strait.
The agreement triggered a noticeable shift in tone across markets, said Fawad Razaqzada of Forex.com. "If shipping flows pick up meaningfully, it should take some of the heat out of oil prices and, by extension, unwind some of the stagflation trades that dominated recently."
WTI settled down 16% at $94.41 a barrel and Brent fell 13% to $94.75.
Precious metals were boosted by the announcement of a cease-fire between the U.S. and Iran. That could lift hopes of interest-rate cuts and end selling of reserves by central banks -- so long as the truce lasts.
Front month Comex gold for April rose nearly 2% to $4,749.50 an ounce, its third consecutive rise, according to Dow Jones Market Data. It is up 9.8% since the start of this year. Front month Comex silver for April rose 4.7% to $75.224, snapping a three-session losing streak.
"The medium-term tailwinds -- stagflation risks, U.S. election uncertainty, and the prospect of a weaker U.S. dollar alongside falling real rates -- should support a move toward $5,900/oz by late 2026," wrote UBS strategist Dominic Schnider.
TODAY'S TOP HEADLINES
Why Fed Rate-Cut Prospects Have Dimmed, With or Without a Cease-Fire
The cease-fire between the U.S. and Iran offers a chance to defuse the latest serious threat to the global economy. But for the Federal Reserve, it may have replaced one problem with another: an energy shock that lingers just enough to keep inflation elevated without being severe enough to destroy demand, leading to an extended interest-rate pause.
Minutes from the Fed's March 17-18 meeting, released Wednesday, underscored that the war hadn't created the Fed's reluctance to cut so much as it had complicated an already-cautious posture. Even before the conflict, the path to rate cuts had narrowed. The labor market had stabilized enough to ease recession fears, and progress toward the Fed's 2% inflation goal had stalled.
The Fed held its benchmark rate steady in a range between 3.5% and 3.75% at that meeting, the second consecutive pause after officials cut rates three times in the final months of 2025.
Iran Tightens Its Grip on Hormuz Despite Cease-Fire
Iran told mediators it would limit the number of ships crossing the Strait of Hormuz to around a dozen a day and charge tolls under the cease-fire struck by President Trump, showing Tehran plans to tighten its grip on the world's most important energy-shipping lane.
Ships that pass will have to coordinate with the Islamic Revolutionary Guard Corps, the powerful paramilitary group that has been labeled a terrorist organization by the U.S. and the European Union, Arab mediators said.
Four ships were allowed to pass Wednesday, the fewest so far in April, according to S&P Global Market Intelligence, down from more than 100 a day before the war. Iran is requiring ships to work out toll arrangements ahead of time and then pay the fees in cryptocurrency or Chinese yuan, mediators and shipbrokers said.
Meta Announces New AI Model in Major Test of Company's Ambitions
Meta Platforms announced a new large language model Wednesday, its first major new artificial-intelligence model in more than a year.
The rollout of the model, called Muse Spark, is a critical moment for Meta, which has spent billions of dollars hiring AI talent in a bid to catch up to OpenAI, Anthropic and Google DeepMind. The leading labs have been putting out models at an accelerating pace.
In a departure from its previous models, which were open-source, Muse Spark is a closed model that will power Meta's AI chatbot and AI features within it. The company said it planned to release a private preview of the model to a few partners via an application programming interface, or API, which allows developers to build on top of existing software, and at some later point might open-source some versions of the model. Open-sourcing a model gives the public access to some parts of the code and other architecture behind it.
Paramount President Jeff Shell Leaving Amid Lawsuit
Jeff Shell is resigning as Paramount's president and is stepping down as a member of its board of directors, the media and entertainment company said Wednesday.
Shell's resignation comes after an investigation into whether he disclosed confidential company information to a man who claimed to have consulted for the veteran media executive. Paramount said its probe cleared him of wrongdoing.
Shell was accused of leaking material nonpublic information about Paramount's business dealings by R.J. Cipriani, a self-professed fixer and whistleblower who said he did work amounting to crisis communications services for Shell.
Facing Soaring Fuel Costs, Delta Tells Customers to Plan for Pricier Flights
Delta Air Lines's message to travelers: Prepare for higher fares and fewer flights as it faces rising fuel costs.
The biggest U.S. carrier by market capitalization on Wednesday reported its first quarterly loss in nearly three years after its fuel expenses rose $330 million and the values of companies it has a stake in dropped.
In the current quarter, Delta projected its fuel expense soaring $2 billion from a year ago. Jet fuel prices have surged as conflicts in the Middle East have tightened supplies of crude oil.